Good company results fail to excite investors

Brian Benza
Staff Writer | Tuesday March 2, 2010 00:00

Last week, Financial giant BIHL and Security concern G4S released impressive results onto the market while RPC Data's financials were subdued as the stock market weakened and experienced lower trading volumes.

FNBB, Sefcash and Sefalana are some of the companies that have released good results in the past few weeks.

The Domestic Companies Index (DCI) finished last week 0.21 percent softer at 7,682.48 points as gains in ABCH, PrimeTime, Turnstar, Stanchart and BIHL were outweighed by losses in heavy weights FNBB, Sechaba and Letshego.

Despite the company's profits increasing by an impressive 7 percent to P 237.7 million and assets under management rising by 19 percent to P 16.5 billion for the year ended 31 December, BIHL only gained by a thebe on the bourse last week. BIHL is the holding company for Botswana Life and Botswana Insurance Fund Management (BIFM).

In the Life Insurance business, net insurance premium income increased by 31 percent to P1.3 billion, recording an operating profit of P218.8 million - a 45 percent increase from the previous period. 

In the asset management business, the diversification strategy which Botswana Insurance Fund Management (Bifm) embarked on has served the company well again this year, reporting profits that were at similar levels as the prior year.

The share price of G4S Security Limited on the other hand did not move in last week's trade despite the company having released a good set of financial results for the year ended 31 December 2009. Total revenue grew by 22 percent to P136.7m as the group achieved organic growth and margin improvements across all products. Direct expenses and overheads however grew by 19 percent to P103,8m. Profit after tax came in 35 percent higher at P23m.

However, the G4S's share price has shown some positive movement since the company released a cautionary statement recently warning its shareholders about the expected higher earnings for this period.

Looking ahead, analysts expect G4S to continue achieving real growth earnings in 2010 as management is implementing a number of initiatives aimed at driving superior performance and service quality.  RPC Data on the other hand released a subdued set of interim results for the 6 months ended 30 November 2009 as gross profit plunged by 58 percent to P2.8m. The group had an impairment charge of P3.2m but management have indicated that it is a once-off transaction and is therefore not expected to have an impact on the financial statements to be produced for subsequent periods.

The group made a net loss of P3.7m as compared to a profit of P1.3m during the same period in 2008.  The directors decided not to declare any dividends due to the tough trading conditions and delays in project commencements. RPC Data derives some of its revenue from government projects and with the slowing of government's expenditure, we expect this to impact on the group.

Volumes traded on the BSE were lower last week as 928,963 shares, worth P9,559,652 swapped hands as compared to 5,950,604 shares, worth P91,574,334 that were traded the previous week. Sechaba recorded the most trades, with 500,000 shares being traded, followed by BIHL, 141,941 shares and Barclays 81,657 shares.

Regional bank ABC Holdings was the biggest mover, up 3.1 percent to 134 thebe, followed by property developers, PrimeTime and Turnstar up 2.2 percent and 1.8 percent apiece to 182 thebe and 169 thebe respectively. Other gains were in Stanchart up 1.2 percent to 1,645 thebe and BIHL up 1 thebe to 1,010 thebe ahead of the release of their financial results for the year ended 31 December 2009.

On the downside, AVIVA lost 7 percent to close at a new 52-week low of 40 thebe, followed by Olympia which lost 4 percent to 48 thebe and CIC Energy down 3.8 percent to 1,250 thebe. Other losses were in A-Cap, Blue Financial Services, AF Diamonds, FNBB, AF Copper, Sechaba and Letshego.